Selling a Leasehold Flat: Complete Guide
Everything you need to know about selling a leasehold flat, from obtaining management packs and resolving service charge arrears to understanding lease length requirements and the conveyancing process.
Call 0161 371 7190Can You Sell a Leasehold Property?
Yes, you can sell a leasehold property. Millions of leasehold flats change hands every year across England and Wales. When you sell a leasehold flat, you are not selling the building itself but rather assigning the remaining term of your lease to the purchaser. The buyer then takes on the rights and obligations contained within the lease for the unexpired period.
The legal process of selling a leasehold flat is known as an assignment. Your conveyancer prepares a deed of assignment that transfers the lease from you to the buyer. This is registered at HM Land Registry in the same way as a freehold transfer, but the leasehold title also records the terms of the lease, the freeholder, and any management company details.
While the core transaction is similar to a freehold sale, there are additional steps that are unique to leasehold properties. These include ordering a leasehold management pack, providing details of service charges and ground rent, arranging a deed of covenant with the management company, and confirming compliance with any conditions in the lease relating to the sale.
Understanding these additional requirements before you list your property can help you avoid unnecessary delays and ensure a smoother transaction. A proactive approach to gathering the necessary documentation is one of the most effective ways to keep your sale on track.
Key Points
- Selling a leasehold flat involves assigning your lease to the new buyer
- Additional documentation is required compared with freehold sales
- Early preparation of management packs and service charge information reduces delays
Learn more about how leasehold properties are managed on our leasehold management page.
Leasehold Management Packs
A leasehold management pack is one of the most important documents in the sale of a leasehold flat. It provides the buyer's solicitor with detailed information about how the building is managed, what charges apply, and whether there are any issues that could affect the property.
The management pack typically contains a summary of current and projected service charges, details of the building insurance policy, ground rent information, the accounts for the management company or residents' association, any planned or recent major works, compliance certificates, and answers to standard pre-contract enquiries about the management of the building.
The cost of a leasehold management pack varies depending on the managing agent or freeholder but typically ranges from £200 to £500 plus VAT. Some agents charge additional fees for expedited packs or supplementary questions raised by the buyer's solicitor during the conveyancing process.
Timescales for receiving a management pack can be a significant source of delay. Well-organised managing agents can typically produce a pack within five to ten working days, but less responsive agents or freeholders may take four to six weeks or longer. This is why choosing a reliable managing agent is so important for leaseholders who may wish to sell in the future.
To reduce the risk of delays, it is advisable to order the management pack as soon as you instruct your conveyancer, ideally before you have even found a buyer. This front-loading of the process can save several weeks and demonstrates to potential purchasers that you are a well-prepared seller.
What a Management Pack Includes
- Service charge accounts and budget forecasts
- Building insurance certificate and schedule of cover
- Details of planned or recent major works and section 20 consultations
- Ground rent details and payment history
- Answers to LPE1 and LPE2 standard enquiry forms
Find out more about the contents and ordering process on our leasehold management pack page.
Lease Length and Its Impact on Sale
The remaining length of your lease is one of the most critical factors when selling a leasehold flat. A long lease with over 90 years remaining is generally straightforward to sell, whereas a short lease can present significant challenges including difficulty securing mortgage finance and a reduced sale price.
The 80-year threshold is particularly important. Once a lease falls below 80 years, a concept known as marriage value comes into play. Marriage value represents the increase in value of the property that results from the lease being extended, and the freeholder is entitled to a share of this. This means the cost of extending a lease increases significantly once it drops below 80 years, making the property less attractive to buyers.
Most mortgage lenders require a lease to have a minimum unexpired term, typically between 70 and 85 years at the time of purchase, with some lenders requiring the lease to extend beyond the end of the mortgage term by a set number of years. If your lease is close to or below these thresholds, many potential buyers will be unable to obtain mortgage finance, severely limiting your market.
If your lease is approaching the critical thresholds, you should seriously consider extending the lease before putting the property on the market. A lease extension can add tens of thousands of pounds to the value of your flat and opens the property up to the full range of mortgage products. Alternatively, you can agree with the buyer that you will begin the statutory lease extension process before completion, although this adds complexity to the transaction.
It is worth noting that to exercise the statutory right to a lease extension you must have owned the property for at least two years. If you have not yet reached this qualifying period, an informal or voluntary extension negotiated directly with the freeholder may be an alternative, though the terms may be less favourable.
Lease Length Thresholds
- 90+ years remaining - generally no issues with mortgage lenders or buyers
- 80–90 years remaining - some lenders may decline and buyers may negotiate on price
- Below 80 years - marriage value applies making future extensions more expensive
- Below 70 years - most mortgage lenders will refuse to lend and sales become cash-buyer only
For a detailed breakdown of the extension process and costs, see our lease extension guide.
Service Charges and Ground Rent on Sale
Service charges and ground rent are ongoing financial obligations associated with leasehold ownership, and they play an important role in the sale process. The buyer's solicitor will want to see a clear picture of all charges associated with the property, including historical and projected costs.
When a leasehold flat is sold, the service charge for the current period needs to be apportioned between the seller and the buyer. This means the charges are split based on the completion date so that each party pays their fair share. The same principle applies to ground rent. Your conveyancer will calculate the apportionments as part of the completion statement.
If there are any service charge arrears on the property, these must be cleared before or at completion. The buyer's solicitor will request a statement from the managing agent confirming that all charges have been paid up to date. Outstanding arrears can cause delays and may even lead to the buyer withdrawing from the sale if the situation is not resolved promptly.
Buyers and their solicitors will also examine the level of service charges carefully. High or rapidly increasing service charges can deter buyers and affect the price they are willing to pay. Similarly, if major works are planned and a section 20 consultation has been issued, the buyer will want clarity on their potential liability.
Ground rent provisions in the lease are another area of scrutiny. Leases with escalating ground rent clauses - particularly those that double periodically - can make properties difficult to sell or mortgage. Following the Leasehold Reform (Ground Rent) Act 2022, new residential leases are subject to a peppercorn ground rent, but existing leases with onerous ground rent terms remain a potential issue for sellers.
Charges to Address Before Sale
- Clear any outstanding service charge arrears before marketing
- Ensure ground rent payments are up to date
- Review the lease for any escalating ground rent clauses that may concern buyers
- Obtain a clear statement of account from your managing agent
For more detail on these costs, visit our service charge guide and ground rent guide.
Deed of Covenant and Licence to Assign
Many leases require the incoming buyer to enter into a deed of covenant with the management company or freeholder. This document is a formal agreement by the new leaseholder to observe and perform the obligations contained in the lease, particularly those relating to the payment of service charges and compliance with the rules of the building.
The requirement for a deed of covenant is usually set out in the lease itself. If your lease contains such a provision, the sale cannot complete until the deed has been executed by all necessary parties. Your conveyancer will draft the deed and coordinate with the management company or their solicitors to ensure it is signed in time for completion.
Some leases also require a licence to assign, which is a formal consent from the freeholder or management company permitting the transfer of the lease to the new owner. The licence to assign is more common in commercial leases but does appear in some older residential leases. Where required, the freeholder cannot unreasonably withhold consent.
There are typically fees associated with the deed of covenant and any licence to assign. The managing agent may charge an administration fee for processing the deed, and the freeholder's solicitor may charge legal fees for granting the licence. These costs usually fall to the seller but can be negotiated as part of the sale terms.
The involvement of the managing agent is often crucial in this part of the process. A responsive agent will process the deed of covenant quickly and liaise with the freeholder's solicitors to prevent unnecessary hold-ups. Delays in processing deeds of covenant are a common source of frustration in leasehold sales.
Deed of Covenant Requirements
- Check your lease to confirm whether a deed of covenant is required
- Budget for administration and legal fees charged by the managing agent and freeholder
- Ensure the deed is processed early in the conveyancing timeline to avoid completion delays
- A licence to assign may also be needed for certain leases
Read more about this requirement on our deed of covenant page.
Common Delays When Selling Leasehold
Leasehold sales are widely acknowledged to take longer than freehold transactions, and understanding the most common causes of delay can help you prepare and mitigate them. Being aware of potential hold-ups is essential when selling a leasehold flat.
The most frequent cause of delay is the management pack. If your managing agent or freeholder is slow to produce the pack, your conveyancer cannot respond to the buyer's solicitor's enquiries. This can add weeks to the process and in the worst cases can lead to buyers losing patience and withdrawing from the sale entirely.
Slow freeholder responses are another common problem. Some freeholders, particularly large institutional investors, have lengthy internal processes for responding to enquiries, granting licences to assign, or approving deeds of covenant. There is often little that the seller or their conveyancer can do to speed up these responses, which makes it all the more important to initiate the process early.
For buildings over 11 metres or with cladding concerns, an EWS1 form (External Wall System fire safety assessment) may be required by the buyer's mortgage lender. Obtaining an EWS1 form can be a lengthy and expensive process, particularly if remedial works are needed. The absence of an EWS1 form, or one with a poor rating, can make a property extremely difficult to sell.
Other common delays include additional enquiries raised by the buyer's solicitor about lease terms, disputes between leaseholders and the freeholder or managing agent, and issues uncovered during the survey. Having a well-managed building with transparent accounts and responsive management significantly reduces the likelihood of these problems arising.
How to Minimise Delays
- Order the management pack as early as possible, ideally before finding a buyer
- Ensure all service charges and ground rent are paid up to date before marketing
- Confirm whether an EWS1 form is needed and obtain it in advance if possible
- Choose a responsive managing agent who can handle sale enquiries efficiently
- Instruct your conveyancer promptly and keep communication channels open
Learn how choosing the right agent can make a difference on our how to choose a managing agent page.
Frequently Asked Questions About Selling a Leasehold Flat
Can you sell a leasehold property?
Yes, you can sell a leasehold property. When you sell a leasehold flat you are assigning the remaining term of the lease to the buyer. The process is similar to selling a freehold property but involves additional steps such as obtaining a leasehold management pack, ensuring service charge accounts are up to date, and arranging a deed of covenant for the incoming leaseholder.
How long does it take to sell a leasehold flat?
Selling a leasehold flat typically takes longer than selling a freehold property. The additional time is mainly due to obtaining the leasehold management pack from the managing agent or freeholder, which can take between two and six weeks. Overall, completing a leasehold sale usually takes between ten and sixteen weeks from accepting an offer to exchange of contracts, depending on how quickly the management information is provided.
What is a leasehold management pack?
A leasehold management pack is a collection of documents that the seller's conveyancer needs to provide to the buyer's solicitor. It typically includes details of service charges, ground rent, building insurance, any planned major works, the lease terms, management company information, and compliance certificates. The pack is usually ordered from the managing agent or freeholder and can cost between £200 and £500 plus VAT.
Should I extend my lease before selling?
If your lease has fewer than 80 years remaining, it is generally advisable to extend the lease before selling. Below the 80-year threshold a marriage value becomes payable which significantly increases the cost of a future extension for your buyer. Many mortgage lenders will not lend on leases with fewer than 70 to 80 years remaining, which can severely limit your pool of potential buyers and reduce the sale price you achieve.
Are leasehold flats difficult to sell?
Leasehold flats are not inherently difficult to sell, but they do require more preparation than freehold properties. The key factors that can make a leasehold flat harder to sell include a short lease, high service charges, outstanding arrears, ongoing disputes with the freeholder or managing agent, and the absence of an EWS1 form for buildings that require one. Proper preparation and a responsive managing agent can minimise delays considerably.
What happens if there are service charge arrears when selling?
If there are service charge arrears on the property when selling, these will need to be cleared before or at completion. The buyer's solicitor will request confirmation that all service charges and ground rent are paid up to date. Any outstanding amounts are typically deducted from the sale proceeds at completion. Persistent arrears can delay the sale and may cause concern for the buyer's mortgage lender.
Need Help Selling a Leasehold Flat?
Our experienced team can provide the leasehold management packs, service charge information, and documentation you need to sell your leasehold flat without unnecessary delays. We support leaseholders, conveyancers, and estate agents throughout the sale process.